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New court rules help protect New York debtors

Debt is extremely common, and nearly unavoidable, in many households in Long Island, New York. For decades, debt levels throughout the country continued to rise, which created significant problems for many people and families when the economic recession hit. Since the economy has begun recovering, people have attempted to reduce their debt loads where possible, but many people continue to struggle with debt and seek bankruptcy or some form of debt relief workout.

In an effort meant to protect consumers from unfair claims and defaults in collection cases, primarily related to credit card debt, New York courts recently announced new requirements for debt collectors who are filing suit in New York courts. The majority of these filers are third parties who purchased old debt from the original creditor. The new rules require that the parties filing suit submit additional evidence in support of their claims. They must submit affidavits, along with proof of the debt, confirmation that the debtor was notified of the suit, evidence of the chain of ownership of the debt and evidence that collection is not barred by the statute of limitations.

Harassment from creditors and debt collectors is far too familiar for many people struggling with heavy debt loads. Many consumers may feel helpless and hopeless in their situations, unsure of what they can do, if anything, to get out from under their debt. Bankruptcy is one option that can be very helpful for people with extreme levels of debt. However, there are many other options for debt relief that can be a better fit for consumers.

When people are worried about the loss of certain assets or if certain circumstances could create problems for a bankruptcy case, there are a range of other potential solutions. For example, mortgage debt is often the most significant debt carried by many consumers. Achieving a mortgage modification to reach a more feasible mortgage payment could be all that is needed to resolve debt problems. Settling credit card accounts is another form of debt workout that can help reduce overall debt to a more manageable level.

Source: LIBN.com, "New rules established for NY debt collection cases," Sept. 16, 2014

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